| The process of delivering the product to the customer | | | | They have to be carried, stored and distributed. In the |
| is termed as distribution. Distribution management | | | | case of some products, the location of the production |
| consists of two major tasks: physical distribution and | | | | points is totally dictated by production considerations, |
| management of distribution channels. Physical | | | | like proximity to a port or to the source of raw |
| distribution can be defined as the process of reaching | | | | material. In such cases, the production point may be far |
| the product to the consumers. It encompasses all the | | | | away from the market. |
| activities involved in the physical flow of products from | | | | Distribution aids the process of demand generation. It is |
| producers to consumers. | | | | distribution that largely determines the customer |
| It is physical distribution that provides place-utility and | | | | service level. Through this, distribution serves as an |
| time-utility to a product. In other words, it is physical | | | | effective tool for building up of clientele/ market. And |
| distribution that makes the product available at the right | | | | conversely, inefficient distribution leads to loss of |
| place and at the right time, thereby maximizing the | | | | customers and markets. |
| company's chance to sell the product and strengthen | | | | Distribution is very important area for cost savings. |
| its competitive position. If a product could be consumed | | | | Over the years, in most businesses, distribution costs |
| at the place and time of production, there would be no | | | | have grown into a sizeable chunk of the total costs |
| need for distribution. Such products are rare. | | | | and now rank second among all cost elements, next |
| Almost every product gets consumed far away - both | | | | only to the material costs. |
| in time and space - from its point of manufacture. | | | | |